Taiwan Wine Culture: for Health, for Love, for Life

Taiwan is gradually developing a wine culture with the help of those returning after studying or working abroad.

As Taiwan’s wine market continues its growth, sophisticated wine enthusiasts are increasingly seeking out a wider variety of wines that offering more than just brand prestige.

Taiwan’s wine market has come a long way since the mid-1990s when wine first became popular with Taiwan’s elites. At that time, the market focused on two key qualities: health and prestige.

In 1991, the acclaimed U.S. TV news-magazine program 60 Minutes aired a report on the “French Paradox” – the low rates of heart disease among the French, despite their diets rich in fats, which are generally associated with poor cardiovascular health. The report ignited the market for red wine in North America, and in Taiwan as well.

The Taiwan economy was undergoing rapid development at the time, and Taiwan’s new rich eagerly sought out prestigious vintages, particularly from the Bordeaux and Burgundy regions of France. “When people first get interested in wine, they hear about these fabulously expensive things that they have never tried. So what attracts them is famous brands such as Chateau Laffite,” explains Tom Curry, founder and director of international programs of Taiwan Wine Academy (TWA). “We call it buying labels.”

“When people first get interested in wine, they hear about these fabulously expensive things that they have never tried. So what attracts them is famous brands such as Chateau Laffite,”

The mainstream followed the elites’ lead, and the red wine trend inflated into a bubble that eventually burst in the late 1990s. According to local lore, the market became so saturated with wine by the end of that decade that bankrupt importers failed to pay the tariffs on huge quantities of shipments entering the country, leaving the wine to spoil in customs in unrefrigerated shipping containers before being eventually auctioned off for pennies on the dollar.

Dominique Levy, a long-time expat in Taipei and owner of wine importer Formosawine Vintners, recalls seeing people on the roadside selling cases of what had been good wine for NT$100 apiece. “But after two years in the custom warehouses without climate control, it was horrible,” he says. “Wine needs to be protected, even cheap wine. There were no great deals to do.”

After the wine bubble burst, though, a more sustainable market in wine emerged, driven less by brand prestige and more by genuine interest in the taste of the wine. “We have moved beyond label fascination,” says Curry, who sees Taiwan’s evolution as typical for developing wine markets. “Once people have tasted some wine, then you get this upwelling of interest in what’s happening in the glass,” he notes. “The big shift comes when people stop boasting about how much they paid for a bottle of wine, and start boasting about how little they paid.”

“The big shift comes when people stop boasting about how much they paid for a bottle of wine, and start boasting about how little they paid.”

Taiwan’s wine market is far smaller than its beer and spirits markets, comprising less than 10% of the overall alcohol market, but it has seen healthy growth since recovering in the early 2000s, and wine imports rose are on track to rise 15% year-on-year by volume in 2015. According to government statistics, wine imports increased by an average of 8.6% annually by value since 2009, reaching US$147 million in 2014. Taiwan is among the top five wine markets in Asia.

Dominique Levy of Formosa Wines in his store on Fuxing South Rd.

Insiders look to a number of factors behind this burgeoning market. Among them are the many students who depart the island to study abroad and who often return with a keen interest in wine culture, cultivated in places with a thriving wine scenes such as the United States, Australia, and Western Europe.

Levy says that being immersed in wine culture is often instrumental in developing a real passion for wine. “Wine is something that you have to know to really appreciate,” he observes. “There are so many brands, it’s impossible to try all of them. And you have so many appellations, so many grapes, so many methods, you really need a focus.”

According to government statistics, wine imports increased by an average of 8.6% annually by value since 2009, reaching US$147 million in 2014. Taiwan is among the top five wine markets in Asia.

Immersion into wine culture results in much greater knowledge and awareness of good value in wine. “A lot of businesspeople and young people who come back from Europe, the U.S., and Australia return to Taiwan with a love for wine,” says Levy. Equally important, he adds, “they know wine.”

The importance of foreign experience is underscored by the lack of wine education opportunities in Taiwan. Until 2008, Taiwan lacked an internationally accredited wine training school, forcing hospitality industry professionals who needed international accreditation to go abroad. For example, when Angela Wen started a wine importation subsidiary for local industrial firm Tai Fung Trading Co., she needed to earn her certification as a sommelier for the U.K.-based Wine and Spirits Educational Trust (WSET) from a school in Hong Kong.

Curry’s TWA was in fact Taiwan’s first wine school offering certification programs from global wine bodies. He says that he and his wife Naseem Chen entered the market in 2008 based on two key observations. The first was that wine was continuing to grow in popularity in Taiwan, and the second was the realization that “there was nobody in the Chinese-speaking world that was teaching about wine – not in Taiwan or China or anywhere.”

there was nobody in the Chinese-speaking world that was teaching about wine – not in Taiwan or China or anywhere.”

Chen, a certified educator in wine, started offering classes and programs in 2008 in rented hotel rooms and classrooms. The programs quickly grew in popularity, and Curry says that as soon as they settled into their main classroom facility on AnHe Road in 2010, they realized that they needed more space. TWA now has two main classroom spaces and 28 satellite locations.

Initially the classes were filled by hospitality industry professionals, as TWA tapped into a pent-up demand for international wine certification by members of Taiwan’s burgeoning tourism industry. “Everyone in the business has pretty much been educated by our programs,” notes Curry. TWA now has nearly 9,000 alumni, and the proportion of students seeking certification for employment purposes has steadily declined. “Over time, we educated all of them,” he says.

Now, the majority of TWA’s students are wine enthusiasts. Many of them “realize that knowing something about wine is good for them, good for their social life, and good for their professional life,” says Curry, since knowing something about wine is also useful when talking to senior management.

Local wine expert Aaron Chuang, who did all of his basic wine training in South Africa, teaches a class at TWA on South African wines.

TWA is an authorized supplier of certification programs for the WSET and the U.S.-based International Sommelier Guild (ISG), and offers a variety of other classes for enthusiasts. Wine is tasted liberally in all of their classes.

“Our business is raising awareness of wine,” says Curry. “We want people to understand about wine, so they understand what they like and why they like it, and how to recognize what they like and appreciate it when they get it at a value lower than the big labels.”

Old World wines rule

The growing knowledge about wine has led to increased exploration in Taiwan of the thousands of various appellations from around the globe. Angela Wen of Tai Fung says learning more about wine “increases your curiosity and sensitivity, and you will want to try wines from around the world.” Aside from France and other countries in Western Europe, Taiwan imports wines from the United States, New Zealand, South Africa, Canada, and many other sources.

Yet, Old World wines continue to dominate. According to numbers provided by the Taiwan Wine Institute, France remains the leading supplier of wines to Taiwan, with almost one-third of the market by volume, and 54% by value in 2014. By volume, Spain comes in second, and Italy edged out the United States last year for fifth. New World wine regions Chile and Australia placed third and fourth. By value, the United States and Italy tied for second with 9%, Chile ranked third at 7%, and Australia took fourth at 6%.

Levy’s Formosawine Vintners has been in business since 1995 during the French red wine bubble, and his two Formosa Wine shops have specialized in Bordeaux and Burgundy wines ever since. There is good reason why Taiwan’s market remains dominated by French reds, asserts Levy, since Bordeaux and Burgundy are among the most ancient and acclaimed winemaking regions in the world. “Which other place can boast this history?” he asks. “Not many. Bordeaux and Burgundy have this history.”

Wines from Spain and Italy are also growing in appeal in Taiwan, but for reasons of offering acceptable quality table wines at low prices. According to Wen of Tai Fung, wine from the United States, for example, starts at US$3 per bottle, before shipping, taxes, and margins are added, while wines can be had from Spain or Italy for as little as US$1. This explains why the United States comes in only sixth in terms of import volume but takes second place in terms of value.

Wine from the United States, for example, starts at US$3 per bottle, before shipping, taxes, and margins are added, while wines can be had from Spain or Italy for as little as US$1.

The American Institute in Taiwan says that 95% of American wines imported into Taiwan come from California, but adds that consumers here can find quality wines from Washington, Oregon, Idaho, and even New Jersey. The U.S. wine exports to Taiwan are expected to hit US$13.6 million in 2015, growing by 5% over 2014.

Taiwan’s wine market also remains heavily skewed towards red wines over white wines, commonly attributed to the widely touted health benefits of drinking red wine, as well as the notion that red wine goes better with Chinese food. Since that 1991 broadcast of the “French Paradox” by 60 Minutes, the media has frequently reported about the purported health benefits of drinking red wine, linking it to lower blood sugar and blood pressure and better overall cardiovascular health. The healthcare industry is more guarded, however, with many experts expressing concern that any endorsement of the use of an addictive substance would be irresponsible. The medical community seems to have settled on the consensus that a daily glass of red wine – or two, for men – could be beneficial to health, but that should be the limit.

Levy says that this focus on health benefits distracts from the simple pleasures of drinking wine, and causes consumers to choose wines that might not be best suited for pairing with Taiwan’s cuisine. “The media says that more tannins are better,” observes Levy. “Red wines have more tannins, and so Taiwanese prefer more tannic wine, more structured wine,” particularly Cabernet Sauvignon and Syrah.

But the variety of dishes and the boldness of the cuisine in Taiwan actually call for “a more flexible wine, a wine that can be paired with all of the food,” he says. “You have the dish and the wine, like a couple dancing. Either the dish or the wine should be the leader. If both are the leader, they will clash.”

Levy actually prefers white wine to red with Chinese food. “It has the acidity, the aroma, and it is more flexible to pair with many kinds of food,” he says. “Red wine is more monolithic. With Chinese food you always need a wine that is more flexible and can adapt to many dishes.”

Angela Wen also sees a bright future for white wines in Taiwan, citing the hot climate and a general trend towards lighter, healthier foods that are not easily paired with reds.

Entering the Internet era

Since the sheer number of wines and the complexity of wine overwhelms the average consumer, many people seek out a trusted expert to guide them. “You need to trust the person who said the wine is good, as not many people can taste the wine and tell you whether it is good or not,” says Curry. “So the big question is who are you going to trust?”

The importance of trusted relationships in wine-purchasing decisions is a big part of why Internet sales have been slow to catch on in most markets where they are permitted.

For Hannah He, founder of the Wine Lover shop and website, relationships are at the core of her business, and she has seen her shop become the hub of a small community of wine enthusiasts who enjoy what she imports and often attend her many wine tastings. She is planning on opening a second store.

She says that the website in fact contributes to foot traffic at her shop off HePing East Road, attracting web surfers to her door to see the shop for themselves, attend wine tastings, or otherwise enthuse about their passion for wine.

At TWA, “Social networking is a big part of what we do,” says Curry. “Our quite conscious mission is to keep people engaged.” TWA organizes classes into Facebook groups with an assigned person in charge of organizing social events. “We want to create cohesion in the classroom that extends out of the classroom,” Curry explains.

In Taiwan’s education-oriented culture, where taking classes is a normal social activity, he says, wine classes offer excellent opportunities to make new friends and join a new social group. And when the new friends decide to take another course, their former classmates might join as well. “We have wine groups that are still getting together every month for dinner three or four years after their classes ended,” Curry notes.

The Internet may become a much bigger part of Taiwan’s wine market soon, as the government is considering giving the nod to online wine sales. Such sales are already legal in a number of countries, including the United States, Britain, and Australia, but the Taiwan authorities are still trying to work out the regulatory details before the business can be permitted. A key issue is how to verify that the buyer is of age, and a suggested solution has been delivery to drop-off points such as convenience stores where the identity of the purchaser can be verified.

Members of the wine industry are optimistic that online sales will be available in the near future, though it may not lead to a paradigm shift in how wine is sold. Curry notes, for example, that Internet sales in Hong Kong failed to really take off, since “there needs to be a human dimension to wine sales.”

Some suggest that the move to online sales could actually benefit small wine shops by offering them another channel to promote themselves and broaden their reach. And already online wine experts are positioning themselves to take over as arbiters of taste, allowing consumers to read their reviews and purchase directly from the supplier.

Whatever the future of Internet wine sales in Taiwan, it appears likely that wine culture will continue to deepen in this market as more and more people come to appreciate what wine can bring to their lives. Oenophiles speak of marriages rejuvenated by a shared love of wine, and health restored to stressed-out people who learned to slow down and savor their wine.

“Wine is always slow,” observes Levy. “It’s about people who are more tuned in to enjoy life, people who are able to slow down their lives and give a tempo to their lives. People who enjoy food and friends.”

Taiwan Business TOPICS

Taiwan Business TOPICS is published monthly by the American Chamber of Commerce in Taipei, and covers current topic affecting business conditions in Taiwan, an Industry Focus section on a particular industrial sector, and other reports prepared by the magazine’s staff of experienced professional journalists.